London: Oil rose past $82 on Wednesday after China’s crude imports jumped last month, while a weaker dollar and expectations of further policy easing in the United States burnished the appeal of commodities for investors.
US crude for November rose $1 to $82.67 by 1:49pm, leaving it less than $2 from a five-month high above $84 reached last week. November ICE Brent gained 84 cents to $84.34.
Price support came from data showing that China, which the International Energy Agency said on Tuesday has overtaken the US as the world’s largest energy consumer, saw a record 35% increase in September crude oil imports from a year earlier.
Oil ministers arriving in Vienna for an Opec meeting on Thursday, the first in seven months, signalled the producer group would keep output targets steady. Saudi Arabia’s Ali al-Naimi on Monday described the oil market as “well balanced”.
The greenback eased against a basket of currencies on concerns about a second round of quantitative easing, commonly referred to as QE2, in the United States.
“QE2 is influencing prices via the U.S. dollar, on expectations that further easing will push the dollar lower and send oil rising,” Commerzbank analyst Carsten Fritsch said.
“Expectations for further cheap liquidity are also good for commodities and oil markets on expectations there will be more money available to invest in the markets”.
The Chinese trade data also raised some hopes demand would drain bloated inventories. Forecasts show US crude inventories rose last week, while stockpiles of oil products fell.
Robust growth in the world’s emerging economies, particularly China, may be sufficient to save the rest of the world from a double-dip recession, IEA chief economist Fatih Birol said on Tuesday.
A Reuters survey showed that US crude inventories probably rose for a second week in a row last week, adding 1.2 million barrels, while stockpiles of distillates including heating oil and diesel declined for a third straight week, shedding 1.3 million barrels in the week to 8 October.
Gasoline supplies were also forecast to have slid for a third week, by 1 million barrels.
Industry group the American Petroleum Institute (API) will issue its weekly inventory report on Wednesday at 2:00am, followed by government statistics on stockpiles and demand from the US Energy Information Administration (EIA) on Thursday at 8:30pm. Both reports come a day later than usual because of Monday’s Columbus Day holiday.
Oil markets will also focus on the release of the International Energy Agency’s (IEA) October oil market report on Wednesday at 1:30pm.
Workers at four out of five working Total refineries in France will halt production progressively as part of a national strike, the CGT French union said .
The Obama administration on Tuesday lifted a ban on deepwater drilling seven weeks ahead of schedule, saying new rules cut the risk of a repeat of the BP oil spill, the worst ever to hit the US